It has not yet been decided whether a surety for an insolvent buyer has a right to stop in transitu, but Mr. Benjamin, in his work on Sale (a), says, "That if a surety for an insol"vent buyer should pay the seller, he (may) now have the right of stoppage in transitu, if not in his own name, at "all events in the name of the seller, by virtue of the "provisions of the fifth section of the Mercantile Law "Amendment Act (19 & 20 Vict. c. 97)." That section in effect says that every person who, being surety for the debt of another, shall pay such debt, shall be entitled to stand in the place of the creditor, and to use all the remedies, and if need be, and upon a proper indemnity, to use the name of the creditor, in any action or other proceeding at law or in equity, in order to obtain from the principal debtor, or any co-surety, co-contractor, or co-debtor, as the case may be, indemnification for the advances made and loss sustained by the person who shall have so paid such debt (b).

The right of stoppage in transitu can be exercised only whilst the seller is wholly or partially unpaid.

There never could be any question made, that if the seller was ever to have the right of stoppage in transitu at all, he must have it when he was wholly unpaid; but it was at one time a question whether he could have any such right when partially paid.

In Hodgson v. Loy (e), in 1797, the bankrupt had purchased of Cooper 104 firkins of butter, at 41s. a firkin. He paid him 301. on account, consented to consider an old account of 204. due to him from Cooper as paid, and gave Cooper a bill for 1007., in all paying him 1507. on account. Then after his bankruptcy the defendant by Cooper's desire stopped the goods in the hands of a carrier. Some months afterwards, Cooper tendered the assignees of the bankrupt

() Benjamin on Sale, Book V., Part I., s. 1, 5th ed.,

(b) See Imperial Bank v. London and St. Katherine Dock Co., 46 L. J. Ch. 335 ; (1877), 5 Ch. D. 195.

(e) Hodgson v. Loy, 7 T. R. 410.

the bill, which in the meantime was dishonoured, and the 301. The action was trover by the assignees. They contended that stoppage in transitu was a rescission of the contract, and therefore could not be exercised when there had been a part payment, at least without an offer to return the price actually paid; and that in this case the tender came too late, and did not include the debt for 201. for which Cooper had given credit.

The Judges at first doubted, and had ordered a second argument on this point, but before the argument they said it was unnecessary. "They were clearly of opinion that the "circumstance of the vendee having partially paid for the 66 'goods, does not defeat the vendor's right to stop them in "transitu, the vendee having become a bankrupt."

This point is now set at rest by section 38 (1) of the Sale of Goods Act, which provides that "the seller of goods is "deemed to be an 'unpaid' seller within the meaning of this "Act-when the whole of the price has not been paid or "tendered."

Neither does it make any difference, though the goods. were sold on credit which had not expired at the time of the stoppage, so that the price was not then due. In two cases which were very much litigated, Inglis v. Usherwood (a), in 1801, and Bohtlingk v. Inglis (b), in 1803, the litigation arose out of a transaction in which a cargo of goods was shipped on board a vessel chartered by the bankrupt, and according to the terms of the contract "the goods were to be drawn for a "month after shipment." A stoppage in transitu made before the lapse of the month was held good; and it does not seem to have been thought worth while even to raise the point that the time had not come when the sellers were entitled to demand payment, if the buyer had remained solvent.

But when the seller has received bills of exchange or other securities for the whole price, the case may seem not so clear. He is not quite a paid seller, for the bills may prove

(a) Inglis v. Usherwood, 1 East, 515.
(b) Bohtlingk v. Inglis, 3 East, 381.

worthless; he is not quite an unpaid seller, for the bills may prove good. It seems, however, very well settled, that where the seller is not otherwise paid than by having received the insolvent buyer's acceptances, he may stop the goods; though he may have negotiated the bills, and they are still outstanding and not yet at maturity. And this is very reasonable, for it is quite certain that the insolvent will dishonour his acceptances, and all but certain that the holders will fall back on the drawer for payment (a).

The effect of taking a bill or note from the debtor depends on the intention of the parties. Prima facie, it merely amounts to an agreement to give the debtor credit for the time it has to run, and the effect is to suspend both the seller's lien and his right to sue for the price of the goods until the bill has arrived at maturity and been dishonoured, or the buyer has become insolvent; but it may have been the intention of the parties that the giving of the bill should be an absolute payment, in which case the seller runs the risk of its being paid, and he is in the same position as if he had been paid in cash. The buyer can no longer be sued for the price of the goods, although he remains liable on the

bill (b).

In the case of Feise v. Wray (c), in 1802, already cited, Fritzing, the seller, had drawn bills on Browne, the buyer, for the full price. Browne accepted the bills, and Fritzing negotiated them.

Browne failed, and the goods were stopped on the 11th of September. The bills did not

(a) See Sale of Goods Act, s. 38 (1) (b).

(b) Owenson v. Morse, 7 T. R. 66. On the question of what amounts to payment, see Bolton v. Richard, in 1795, 6 T. R. 139; Read v. Hutchinson, in 1813, 3 Camp. 352; Swinyard v. Bowes, in 1816, 5 M. & S. 62; Van Wart v. Woolley, in 1824, 3 B. & C. 439; Hawse v. Crowe, in 1826, 1 Ry. & M. 414; Robinson v. Read, in 1829, 9 B. & C. 449; Robson v. Oliver, in 1847, 10 Q. B. 704; 16 L. J. Q. B. 437. And where the seller elects to take some form of payment other than cash, Everett v. Collins, in 1810, 2 Camp. 515; Brown v. Kewley, in 1801, 2 B. & P. 518; Smith v. Ferrand, in 1827, 7 B. & C. 19; Marsh v. Pedder, in 1815, 4 Camp. 257; Camidge v. Allenby, in 1827, 6 B. & C. 381; Alderson v. Langdale, in 1832, 3 B. & Ad. 660; Atkinson v. Hawdon, in 1835, 2 Ad. & El. 628; Sibree and Tripp, 15 M. & W. 23; Goddard v. O'Brien, 9 Q. B. D. 37; Bidder v. Bridges, in 1887, 57 L. J. Ch. 300; 37 Ch. D. 406.

(c) Feise v. Wray, 3 East, 93.

arrive at maturity until the 7th of October, when they were dishonoured; but Fritzing himself had by that time become insolvent, and the bills were not taken up; yet the stoppage was held good, the King's Bench saying that the right of the holder of the bills to prove against the estate of Browne could not have more effect than part payment.

In Patten v. Thompson (a), in 1816, the plaintiffs had drawn on the buyer for the price, and held his acceptances, which were not due at the time they stopped the goods, yet the stoppage was held good.

In the case of Wood v. Jones (b), in 1825, Brightman, of Newcastle, had consigned to the plaintiffs, Quebec merchants, goods to be sold for his account. The plaintiffs then shipped to Brightman three cargoes of timber, but not specifically in return for Brightman's consignment. The plaintiffs drew on Brightman to cover the third cargo. Two of the cargoes arrived: Brightman dishonoured the bill, and the plaintiffs' agent, believing that Brightman's consignment would not cover the value of the timber, stopped the third cargo on board the defendant's ship. It was argued for the defendant that a stoppage in transitu cannot be made on a mere apprehension that the goods in the hands of the consignor might not ultimately be sufficient to cover the consignment, and that to justify a stoppage in transitu, the agent must be in a position to show that upon a balance of the accounts at the time the stoppage is made his principals had a specific liquidated demand against the consignee. The Court held the stoppage to be good, Abbott, C. J., saying, "that if the cargo "in question had been intended as a return for the goods "consigned by Brightman there would have been a great "deal of weight in the argument."

In Edwards v. Brewer (c), in 1837, the Exchequer would not listen to an attempt to argue that the seller who held the buyer's acceptance not yet at maturity, could not stop the goods without tendering the acceptance.

(a) Patten v. Thompson, 5 M. & S. 350.
(b) Wood v. Jones, 7 Dow. & R. 126.
(c) Edwards v. Brewer, 2 M. & W. 375.

Against these cases is to be set the Nisi Prius decision of Lord Ellenborough in Daris v. Reynolds (a), in 1815, which certainly seems inconsistent with them. There Peacock and Company, the sellers, held the buyer's acceptance for the goods; the buyer sold the goods to Davis, the plaintiff, whilst yet at sea, and endorsed to him the bill of lading; but it was not stamped, and therefore could not be proved; then Peacock and Company stopped the goods, and got them from the defendant, a wharfinger, under an indemnity. The plaintiffs recovered in trover, and Lord Ellenborough is reported to have said, that "till the time of credit had "expired, and the bill was either paid or dishonoured, "Peacock was in the situation of a paid vendor." The only possible distinction between this case and those previously cited, is that there had been an assignment for value in this case, but unaccompanied by taking possession or by proof of the indorsement of the bill of lading. In Dixon v. Yates (b), a countermand of authority to receive the goods under circumstances precisely similar, but made after the bill accepted by the intermediate purchaser was at maturity and dishonoured, was held good. The case is an authority, that the taking of the insolvent's acceptances by the seller has no effect on the seller's right as against a sub-buyer (who has not taken an indorsement of a bill of lading), after the acceptances are dishonoured. And Feise v. Wray (c) is an authority that the taking of the buyer's acceptances does not suspend the seller's right to stop the goods, as against the original buyer. Davis v. Reynolds (d) is a decision that it does suspend them as against a sub-buyer. The reason of this distinction is not obvious: the probability is, that Lord Ellenborough, though as a Judge he could not read the bill of lading for want of a stamp, was not able to prevent his judgment being warped by the natural feelings of repugnance to the effect on evidence of the stamp laws (certainly for long

(a) Davis v. Reynolds, 4 Camp. 267.

(b) Dixon v. Yates, 5 B. & Ad. 313, post, p. 370.
(c) Feise v. Wray, 3 East, 93, ante, p. 350.

(d) Davis v. Reynolds, 1 Stark. 115.